G.R. No. 175726 March 22, 2017
Land Bank of the Philippines, Petitioner vs. Heirs of Antonio Marcos, Sr., Respondents

FACTS

The respondents, heirs of Antonio Marcos, Sr., owned two agricultural landholdings in Sorsogon. Pursuant to the Comprehensive Agrarian Reform Law, they offered to sell these lands to the government. Petitioner Land Bank of the Philippines (LBP) initially valued the properties at ₱195,603.70 and ₱79,096.26, respectively. Through their authorized representative, Ramiro Marcos, the heirs indicated acceptance of these valuations in their reply to the DAR. However, while payment was pending, the DAR initiated summary administrative proceedings to determine just compensation. The Provincial Adjudicator set aside LBP’s valuation and fixed new amounts. Dissatisfied, LBP filed a petition for judicial determination with the Regional Trial Court (RTC) sitting as a Special Agrarian Court (SAC).
The SAC affirmed the higher valuations. LBP appealed to the Court of Appeals, arguing that a contract of sale was already perfected by the heirs’ acceptance of its initial offer and that the SAC erred in its valuation method. The CA dismissed LBP’s petition and affirmed the SAC decision. LBP elevated the case to the Supreme Court via a petition for review on certiorari.

ISSUE

The core issues were: (1) Whether the heirs’ acceptance of LBP’s initial valuation perfected a contract of sale, thereby precluding a judicial determination of just compensation; and (2) Whether the SAC correctly determined just compensation.

RULING

The Supreme Court denied LBP’s petition and affirmed the lower courts’ decisions. On the first issue, the Court held that no contract of sale was perfected. The acceptance indicated in the Landowner’s Reply forms was merely a preliminary step in the compulsory acquisition process under RA 6657. The law mandates that the final determination of just compensation is a judicial function, vested exclusively in the SAC. The alleged “acceptance” did not constitute a meeting of the minds for a voluntary sale but was part of the administrative procedure, which remains subject to the landowner’s right to seek judicial fixation of just compensation.
On the second issue, the Court found that the SAC did not commit reversible error. While LBP argued the SAC disregarded the factors in Section 17 of RA 6657, the Court ruled that the SAC enjoys wide discretion in evaluating evidence to determine just compensation. The SAC considered relevant factors, including the valuation of comparable properties (Hacienda de Ares), the land’s nature, and its income. The fact that it adopted a valuation similar to the Provincial Adjudicator’s did not mean it abdicated its duty to make an independent determination. The Court emphasized that the SAC’s factual findings, when supported by evidence and affirmed by the CA, are generally binding. LBP failed to sufficiently prove that the SAC’s valuation was arbitrary or baseless.